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slamgirl [31]
2 years ago
15

Jack in the Box recently estimated that the cross price elasticity of demand for chicken sandwiches with respect to the price of

burgers is -1.8. What percent change in unit sales of burgers will result from a 1% increase in the price of chicken sandwiches?
Business
1 answer:
Damm [24]2 years ago
7 0

Answer:

-1.8%

There would be a decrease in demand of 1.8%

Explanation:

Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.

If cross price elasticity of demand is positive, it means that the goods are substitute goods.

If the cross-price elasticity is negative, it means that the goods are complementary goods

Cross price elasticity = percentage change in quantity demanded / percentage change in price

-1.8 = percentage change in quantity demanded / 1%

percentage change in quantity demanded  = -1.8%

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If the minimum attractive rate of return is 7%, which alternative should be chosen assuming identical replacement (like kind exc
ira [324]

Answer:

The alternative that should be chosen assuming identical replacement is:

Alternative B.

Explanation:

a) Data and Calculations:

Alternatives:

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First Cost                           $5,000     $9,200

Uniform Annual Benefit     $1,750      $1,850

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Annuity factor                   3.387          5.971

Present value of annuity $5,927.25 $11,046.35

Net cash flow                 $927.25     $1,846.35

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Answer:

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